#edgeforex #trading #market #stocks #money #forex #candlestick #chart #opportunities #global #affect #positive #volume #Institutional #pandemic #outlook #december #bitcoin candlestick

Candlestick charts are very different from regular bar charts. 

Traders often favour candlestick charts for day trading because they provide a more pleasurable visual view of pricing. 

To use candlestick chart analysis to a trading strategy, you must first grasp the essential components of a candle and what they signify. 

A candlestick chart is basically a chart made up of individual candles that traders use to analyse market activity. Candlestick price action entails determining where the price began for a period, where it closed for a period, and the price highs and lows for a certain time.

Price action may provide traders in all financial markets with indications about trend and reversal patterns. For example, groupings of candlesticks may build patterns that appear across forex charts and can suggest trend reversals or continuance. Individual candlestick formations can potentially suggest market buy or sell entries. 

The time-frame selected by the trader determines the timeframe depicted by each candle. The daily time-frame is a common time-frame, therefore the candle will show the open, close, high, and low for the day. The many components of a candle might help you estimate where the price might go; for example, if a candle closes significantly below its open, it may imply additional price decreases.

A candle on a candelstick chart is interpreted as 

A price candle is made up of three distinct points (open, close, and wicks). the first thing to examine are the open and close prices of the candles. these points define where the price of an asset begins and ends for a given time period and will be used to build the body of a candle. when you look at the chart, each candle represents the price movement over a certain time period that you specify. if you look at a daily chart, each candle will show the open, close, upper and lower wicks for that day.

Open price:

The open price is the initial price exchanged when a new candle is formed. If the price begins to rise, the candle will become green/blue (colors vary depending on chart settings). The candle will turn red if the price falls.

High Price:

The highest price transacted throughout the period is shown by the top of the upper wick/shadow. If there is no upper wick or shadow, this indicates that the open or close price was the highest price transacted.

Low Price:

The lowest price traded is either the price at the bottom of the lower wick/shadow or, if there is no lower wick/shadow, the same as the close or open price in a bullish candle.

Close Price:

The closing price is the last price transacted during the candle creation phase. In most charting software, if the closing price is less than the open price, the candle will turn red by default. If the closing price is more than the open price, the candle will be green or blue (also depends on the chart settings).

The Wick:

The wick, often known as a’shadow,’ is the next key component of a candlestick. These points are critical since they illustrate the price extremes for a certain charting period. The wicks are easily identified since they are narrower than the body of the candlestick. This is when the power of candlesticks is shown. Candlesticks can assist traders in staying focused on market movement rather than the static of price extremes.

Direction:

The colour of the candlestick indicates the price direction. If the closing price of the candle is more than the initial price of the candle, the price is rising and the candle is green (the colour of the candle depends on the chart settings). If the candle is red, the price closed lower than it opened.

Range: 

The range of a candle is the difference between its highest and lowest price. This may be calculated by subtracting the price at the top of the higher wick from the price at the bottom of the lower wick. (Range = highest – lowest position.) 

Knowing what the points on a candle imply gives traders utilising a candlestick chart a distinct advantage when it comes to detecting trendlines, price patterns, and Elliot waves.